When discussing supply chain management in Africa, words such as bottlenecks, bureaucracy and corruption are often referred to. While there are similarities and differences from region to region and country to country, it is vital to understand these as opposed to grouping the entire continent into one category.
High costs and long lead times are some of the biggest challenges to moving goods in African markets. On average, cargo spends 20 days in African ports, compared to 3-4 days in other countries. This contributes to the estimated 60-70% higher cost in transporting goods in Africa compared to the US or Europe.
Working with third party logistics that understand the regulations and have built up relations can be vital. Managers must also be aware of the lack of a harmonised legal and regulatory environment.
Roads, Transport & Warehousing
Transport networks vary significantly across the continent and it is necessary for organisations to have a good understanding of the road-networks where they operate. Distribution distances tend to be large while distribution centres limited, so evaluating the need for more centres to reduce cost is key.
Warehousing is also an issue; from finding professional operators; to adequately designed warehouses for rent, often key components of the process are overlooked. Working with local operators can allow management to tap into a lower cost structure and provide greater flexibility.
It is vital that management understand how markets operate and whether it makes sense to operate a fleet or to outsource, rent or lease. Transport costs are raised due to poor road conditions leading to more regular maintenance. Smaller organisations can benefit by collaborating with other companies to consolidate shipments.
Skills & Technology
Increasing visibility is a priority and a challenge. While manual labour remains relatively cheap, mid-tech solutions are being explored. Organisations need to play an active role in capability development and understand individual markets.
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This is an extract taken from our full Moving Goods guide.
Many thanks to Supply Chain Lab for contributing this guide.